FHA Down Payment Assistance Program | FHA Grant
Looking for an FHA down payment assistance program? The normal down payment for an FHA loan is 3.5% for a 580 FICO credit score or higher. Depending on your credit score, the FHA down payment assistance grant is 2%, 3%, or 4% of the total loan amount that can be applied towards closing costs and/or the down payment.
What is the Down Payment Assistance Program?
- The down payment assistance program for FHA loans is 2%, 3%, or 4% of the 1st mortgage total loan amount with no repayment required.
- The within reach FHA down payment assistance grant is designed to increase home ownership opportunities.
- The grant can be used for the down payment on a home and/or closing costs.
- The down payment for an FHA loan without a grant is 3.5% for 580 FICO credit score or higher and 10% for under 580 FICO credit score.
Down Payment Assistance Grant Overview
- Down payment assistance program is intended to help families who demonstrated financial stability.
- Financial stability is demonstrated by stable employment, income, managing finances, responsible repayment patterns, and satisfactory credit history.
- Intended to help families or individuals who have been unable to save a sufficient amount for a down payment and ready for the next step to home ownership.
- Seller credit of up to 6% is allowed.
- Gift funds are allowed.
- Borrower not required to be a first time homebuyer for the 3% and 4% grant.
Also have a conventional loan down payment assistance program – no repayment.
Loan Types and Terms for the Down Payment Assistance Program
- 30 year fixed term, fully amortized.
- 203(b) within accordance of the FHA guidelines.
- 1-4 units for the 3% and 4% grant.
- Manufactured housing eligible under the FHA manufactured home within reach program – no repayment.
Also have an option in conjunction with the FHA limited and standard 203(k).
Borrower Qualifications
- Occupy the property as a primary residence
- Non-occupying co-borrowers or cosigners are not allowed
- Limit on income of 140% of area median income or maximum allowed by FHA
- Borrowers with new employment with previous two years education need 6 months on the job for standard salary positions and 12 months for variable income
- Chapter 13 bankruptcy must be fully discharged before eligible for financing
- Must take a simple and easy to use homebuyers education course
Credit Requirements for the FHA Down Payment Assistance Grant
Nationwide Mortgage & Realty, LLC has loan programs that will go lower on credit score and more lenient on guidelines. The FHA within reach grant has different guidelines than a regular FHA loan with no grants. The regular down payment for an FHA loan is a 3.5%.
Minimum Credit Score for the Down Payment Assistance Program
The 3% and 4% grant require a 620 FICO credit score or higher. The 2% grant requires a minimum FICO credit score of 580 or higher.
How to Get Pre-approved for a Down Payment Assistance Grant
If you are interested in the down payment assistance grant, you should reach out to a licensed Loan Originator to go over your options. They will put together a list of documents required for processing and underwriting.
Once enough information is gathered, they will run the Automated Underwriting System (AUS) to determine your eligibility. A licensed Loan Originator will go through the pre-approval process steps and write a pre-approval letter once the eligibility is determined.